Misconduct: Elon Musk is likely to face new problems with the SEC due to Twitter entry | news

• Musk announced a 9.2 percent stake in Twitter on April 4
• You missed the disclosure deadline and submitted the wrong form
• The SEC may also file charges against Musk for attempted price manipulation

Tesla boss Elon Musk is a busy user of the microblogging service Twitter and regularly provides his around 81 million followers with more or less interesting information. But it seems that just tweeting is no longer enough for the billionaire: On April 4, it was announced that Musk had acquired a 9.2 percent stake in the short message service and is now Twitter’s largest shareholder. Just a day later, it was reported that the Tesla boss would also get a seat on Twitter’s board of directors, giving him the ability to influence the company’s strategy and management. However, on the day of his appointment, according to Twitter chief Parag, Musk announced that he would not be joining the board after all.

Overall, Musk’s Twitter post didn’t go as planned. The richest man in the world has made some mistakes that could now call the US Securities and Exchange Commission to the scene. The agency has launched investigations into Musk in the past, for example when he asked on Twitter last year if he should sell 10 percent of his Tesla shares. Additionally, some of Musk’s tweets are required to be reviewed by SEC orders before publication by Tesla’s legal department since the billionaire announced on the short message service in 2018 that he wanted to kick out the electric-car maker. of the stock market. Musk sees this as harassment by the SEC and is now seeking to nullify this requirement. He apparently hasn’t improved, as the recent incidents surrounding his Twitter post show.

Musk ignores important deadline when entering Twitter

SEC filings show that Elon Musk bought shares of Twitter on almost every trading day between January 31 and April 1, 2022, increasing his ownership to just over nine percent. The involvement was later revealed in early April. However, the US Securities Act requires a shareholder to disclose his interest within 10 days of passing the five percent hurdle. As the “Reuters” news agency calculated with reference to the SEC forms, this threshold was exceeded on March 14. Musk should have gone on record about his involvement by March 24, but only did so more than a week later. “It’s not really a gray area. It has [die Anteile] Purchased and not presented within ten days. This is a violation. So from the SEC’s perspective, it’s a safe bet,” Adam C. Pritchard, a law professor at the University of Michigan, told Reuters. If the SEC takes action and sanctions this violation, Musk could face a fine of around $ 207,000 US dollars, as law professor Urska Velikonja told the news agency , In view of his assets, which according to “Forbes” currently amount to a good 274 billion US dollars (as of April 8, 2022), this it should hardly affect the new great Twitter shareholder.

Keith Higgins, who served as the SEC’s filing officer under President Barack Obama, told Gulf News that forms that are filed a little late usually don’t trigger an SEC investigation. With Musk, however, things could be different. “This is not your typical late filing,” said Higgins, who also described the process as “not a simple foot error.” Because there are other violations when Musk entered Twitter, and he believes that the missed deadline could accelerate the SEC’s actions. In addition, the US Securities and Exchange Commission, headed by Gary Gensler, wants to shorten the disclosure period for a five percent stake to just five days, according to the news site, to create more transparency. So Musk missed a deadline that the SEC apparently already thinks is too generous, and allowed himself more mistakes.

Tesla boss initially submits the wrong form

When Musk announced his involvement on Twitter, he initially used Form 13G, according to Reuters. However, this is reserved for investors who only passively own the shares but do not wish to actively participate in the business of the company. However, the Tesla boss is becoming an active investor and has already indicated that he wants to make some changes to Twitter, such as introducing an edit button for published tweets. Therefore, he should have used the 13D form, which is intended for active investors. Musk corrected his original filing a day later and submitted Form 13D to change his status to active investor. However, according to Keith Higgins, this error could become a stumbling block for the SEC to open an investigation. “It’s conceivable that they will follow up on this,” Higgins told Gulf News.

SEC investigation is also conceivable due to course manipulation

However, an SEC investigation, if launched, could go far beyond these two formal errors. “I suspect the SEC will have a long and thorough investigation into whether they can file tampering charges against Musk, as well as not doing so. [die Formulare] present,” law professor Urska Velikonja told Reuters. Tesla’s boss recently posted several tweets critical of Twitter. For example, on March 25 he launched a survey on whether Twitter strictly adheres to the principle of freedom of expression, and subsequently asked if a new platform was needed.

Asked by a follower if Musk was considering building a new social media platform that would reveal his algorithm, make free speech a top priority and keep propaganda to a minimum, the Tesla CEO replied that he was “seriously” thinking about it.

This particular statement could now be fatal for Musk, as he, as a well-known Twitter user with a large following, could influence Twitter’s business with such claims. “Her posting of him on social media about possible alternatives to Twitter, in light of previously covert involvement, can be seen as a form of market manipulation aimed at influencing share price,” the former adviser to the SEC, Howard Fischer. However, Fischer, who is now a partner at a law firm, warned that it would be difficult to prove. Whether and to what extent the SEC will once again launch an investigation into Musk remains to be seen.

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